Why Khodorkovsky cannot go free

Jan 03, 2011

Georgy Bovt

Russians still view Mikhail Khodorkovsky as a product of the 1990s and have limited sympathy for his plight.

The second verdict
against oil company YUKOS and its two former leaders, Mikhail Khodorkovsky and
Platon Lebedev was postponed for 12 days, but Moscow Judge Viktor Danilkin finally
began to read the 800-page verdict on Dec. 27, finishing about 4 p.m. on Dec. 30,
two hours before the formal New Year reception in the Kremlin. The judge met
the prosecution’s request almost in full, as both Khodorkovsky and Lebedev were
sentenced to 13-and-a-half years in jail. The new term is to run concurrently
with the eight-year sentence handed down in 2005, meaning that both men will
not go free in 2011 (on the eve of the next presidential election), when their
first term expires, and will remain behind bars until 2017, on the eve of another
presidential election.

The case
against Khodorkovsky has become the most high-profile prosecution in post-Soviet
Russia, but public opinion is
split on it. Liberal-minded people condemn the case as politically motivated
and see it as Prime Minister Vladimir Putin’s revenge for the challenge
Khodorkovsky launched against the authorities in the early 2000s when he openly
financed opposition parties in the Russian parliament. Others, while sympathizing
with Khodorkovsky since he is behind bars – such sympathy for a man convicted of
non-violent crimes being essentially Russian – at the same time believe that he
deserves it. This is mostly because he was one of the country’s best known and
richest oligarchs, who came to prominence in the 1990s by not very noble means,
to put it mildly, and sometimes openly violated the legislation, imperfect as
it was at the time. Khodorkovsky is a symbol of the barbaric privatization
policies of the early 1990s, the results of which are still not accepted by
much of Russian society.

At their first trial, Khodorkovsky
and Lebedev were convicted for large-scale tax evasion. The critics of the
second case, which was initiated soon after the first verdict came into effect,
insist that the case is, in itself, absurd, as Khodorkovsky is accused of
“stealing” the bulk of the YUKOS oil by means of a complicated system of
relations within his vertically integrated holding company, while also manipulating
oil prices with YUKOS subsidiaries and on export markets. Also, in his effort
to make YUKOS an international corporation (against the wishes of the Russian
government), Khodorkovsky was negotiating to sell some of the YUKOS assets to
leading international corporations, including Exxon and Chevron. In
addition, there was the issue of price formation and special rules for
reporting so-called oil well fluid, used cleverly, that provided huge
opportunities for avoiding certain taxes. Yet such techniques were used widely by
almost all Russian oil companies, as were many of the tax minimization schemes
with which YUKOS was charged. Even so, appeals by critics that the same
standards should also be applied to other companies, according to the principle
of equality before the law, have not found a response among Russian judges. Tellingly,
the same approach is often used by rank-and-file traffic police: When ill-fated
drivers stopped for breaching traffic rules argue that everyone does the same
thing, the traffic police normally tell such drivers to mind their own business,
as it is they who have been caught red-handed.

To give Khodorkovsky his
due, he did not quietly accept his fate once behind bars. He kept giving
regular interviews and publishing articles in the Russian media. In some
articles, he even repented for what the Russian public sees as unfair privatization
and called for a social and democratic future for the country. In other items,
he slammed the authorities for their poor economic policy and corruption. With
his critical statements, Khodorkovsky struck a chord with radical opposition
members, who proclaimed him as their informal leader. This was a mistake,
however, in the eyes of the general public, as most Russians, according to
opinion polls, support the verdict against the former tycoon. This is where the
Russian public disagrees with the West.

Abroad, the second
YUKOS verdict was met with widespread condemnation, including by heads of state
such as U.S. President Barack Obama, German Chancellor Angela Merkel, and various
NGOs. Internationally, the YUKOS case is largely seen as being politically
motivated, which could mean serious diplomatic problems ahead for Russia. The U.S.
administration has also threatened further difficulties for Russia’s WTO entry,
a particularly harsh blow after all the hurdles seemed to have been overcome
and hopes had been raised that the more than decade-long negotiations might be
completed.

There is apparently no
simple, constructive solution in sight to the standoff. The Russian leadership,
even if it is biased against Khodorkovsky, cannot objectively see him as a
purely political prisoner, as all his political ambitions before his arrest and
ensuing criticisms against the ruling regime do not provide adequate grounds for
clearing him of his charges under the Russian
legislation currently regulating the difficult and often contradictory
relations between the Russian authorities and private businesses. And the
Russian people continue to see him as a product of the 1990s getting his just
rewards. So Khodorkovsky must remain behind bars, even if this is difficult for
Russia’s western friends to understand.